SBI account holder? Three changes are set to affect you after three days
India's largest lender, State Bank of India (SBI) will introduce some changes for customers from May 1. If you also hold an account with SBI, it is important to know the changes or new rules that SBI is set to bring.
India's largest lender, State Bank of India (SBI) will introduce some changes for customers from May 1. If you also hold an account with SBI, it is important to know the changes or new rules that SBI is set to bring. From May 1 onwards, SBI will be linking its loan and deposit rates to RBI's repo rate, as announced earlier by the bank itself. The new rule is expected to make the loans cheaper. Also, SBI is the first bank to implement this linking process in India.
1. Repo rate- interest rate linkage:
All banks usually finalise their loan interest rates on the basis of MCLR (Marginal Cost of fund base Lending Rate). Most of the times, banks do not pass the changes in repo rate directly to consumers. However, in case, if the banks link the repo rate to loan interest, then the EMIs will come down whenever a Repo rate cut is announced by the RBI. SBI has done this.
Also, SBI customers should note that the new repo rate-loan interest rate linkage process will be applicable only to loans above Rs 1 lakh.
2. Interest rate cut by SBI
After the announcement of repo rate cut by the Reserve Bank of India in its recent credit policy meeting, various other banks including SBI have announced a cut in their interest rates. SBI will bring its interest rates down by 0.10 per cent on a home loan up to Rs 30 lakh from May 1.
3. Savings account deposits above Rs 1 lakh to earn low-interest
As per the new rules, after May 1, the savings account holders with SBI will earn less interest on deposits above Rs 1 lakh. In a notification, the SBI has said that from 1st May 2019 onwards, the SBI customers will get lesser interest on savings accounts by 0.25-0.75 per cent on the amount above Rs 1 lakh. However, the interest rates for deposits up to Rs 1 lakh will be 3.50 per cent while for deposits above Rs 1 lakh, the interest rate will be 3.25 per cent from May 1, 2019, as per SBI.